Obama Denies Plan for Release of Oil Reserves

The White House is denying a news report that the administration and Great Britain have struck a deal for a joint release of oil reserves to help keep down the price of gas.

"The reports of an agreement are inaccurate," said White House Spokesman Jay Carney. "We regularly consult with the British on energy issues, and any discussion that we had was in that context. We will continue to monitor the situation and consult with them and others."

Carney said reports of such a deal are "inaccurate" and "false," adding that there was no timetable for an agreement.

U.S. crude futures fell as much as $1.58 from a high of $106.18 a barrel after the report.

Reuters reported that President Barack Obama and British Prime Minister David Cameron discussed a release of oil from the U.S. strategic reserve during a meeting in Washington Wednesday , a U.K. official with knowledge of the talks told the wire service.

The leaders spoke on the issue without reaching a decision, according to the official, who asked not to be identified because the information isn’t public.

Reuters later reported that two British sources say Britain had decided to cooperate with the United States in a bilateral agreement to release strategic oil stocks in an effort to prevent high fuel prices from derailing economic growth in a U.S. election year.

"We regularly consult with the British on energy issues and any discussion that we had was in that context. We will continue to monitor the situation and consult with them and others," an Obama administration official said.

Rising world oil prices have pushed U.S. gasoline prices up sharply this year and threaten to choke economic recovery ahead of Obama's bid for re-election in November.

Democrats in Congress have urged Obama to use the oil stockpile as gasoline prices have risen amid the standoff with Iran over the Islamic republic’s nuclear program. Regular gasoline at the pump, averaged nationwide, has increased 7.2 percent from a year ago, according to AAA data. Brent crude, the benchmark grade for U.S. imports from Europe and Africa, has climbed 15 percent in the past 12 months.

Last week, Sen. David Vitter told LIGNET in an exclusive interiview that any move to release stockpiles from the reserve is purely political.

The strategic oil reserves are meant to be used in an emergency, Vitter said, "some sort of national security, or maybe natural disaster, emergency. Now, it’s come up recently because last year, the president made a significant release from the reserve and he’s considering it again this year.

"In my opinion, that’s for pure domestic political purposes to try to play with the price and look like he’s doing something about the price of gasoline. The danger is, we’re lessening our reserve, we’re lessening our insurance policy, if you will, for a true emergency. And Lord knows there’s a very real possibility that that would happen, over Iran or something else in the next year. So I have real concerns about this planned or expected release from the reserve by President Obama because we don’t have that real emergency – at least not yet.”

The United States has used its reserve 18 times since 1985, including in 2008 after hurricanes struck the Gulf Coast. It was last tapped in July and August 2011 under an International Energy Agency effort to ease shortages of Middle East supply.

U.K. Chancellor of the Exchequer George Osborne said Wednesday that rising oil prices are something “all economies will be concerned about.”